Correlation Between SHIP HEALTHCARE and Sabra Health
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and Sabra Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SHIP HEALTHCARE and Sabra Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and Sabra Health Care, you can compare the effects of market volatilities on SHIP HEALTHCARE and Sabra Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SHIP HEALTHCARE with a short position of Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Sabra Health.
Diversification Opportunities for SHIP HEALTHCARE and Sabra Health
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between SHIP and Sabra is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and Sabra Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Health Care and SHIP HEALTHCARE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SHIP HEALTHCARE HLDGINC are associated (or correlated) with Sabra Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Health Care has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Sabra Health go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and Sabra Health
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to under-perform the Sabra Health. But the stock apears to be less risky and, when comparing its historical volatility, SHIP HEALTHCARE HLDGINC is 1.05 times less risky than Sabra Health. The stock trades about -0.04 of its potential returns per unit of risk. The Sabra Health Care is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,723 in Sabra Health Care on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Sabra Health Care or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. Sabra Health Care
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| Sabra Health Care |
SHIP HEALTHCARE and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and Sabra Health
The main advantage of trading using opposite SHIP HEALTHCARE and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, Sabra Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sabra Health will offset losses from the drop in Sabra Health's long position.| SHIP HEALTHCARE vs. Evolution Mining Limited | SHIP HEALTHCARE vs. Ubisoft Entertainment SA | SHIP HEALTHCARE vs. RCS MediaGroup SpA | SHIP HEALTHCARE vs. Beijing Media |
| Sabra Health vs. CENTURIA OFFICE REIT | Sabra Health vs. Infrastrutture Wireless Italiane | Sabra Health vs. TITANIUM TRANSPORTGROUP | Sabra Health vs. KAUFMAN ET BROAD |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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